Telangana Sets Additional Surcharge To Zero For Open Access Consumers

The Telangana Electricity Regulatory Commission (TGERC) has made a notable decision regarding electricity charges for large industrial and commercial consumers using the Open Access (OA) facility. In its order finalized on September 27, 2025, the Commission set the Additional Surcharge (AS) for these OA consumers at NIL, or zero, for the second half of the current financial year. This means that from October 1, 2025, to March 31, 2026, open access users will not be required to pay this particular charge.

The Additional Surcharge is a regulatory mechanism designed to compensate the state’s distribution companies, TGDISCOMs, for fixed costs incurred due to existing power purchase agreements and generation capacity that may become stranded when consumers purchase power from third-party sources under Open Access. Typically, the AS ensures that the costs of stranded power do not negatively impact the finances of the distribution companies.

In determining the zero rate, the TGERC undertook a detailed review of financial and consumption data. The initial calculation of recoverable stranded charges was estimated at 8.98 crore rupees, which translated into an Additional Surcharge of ₹0.35/kWh. However, after factoring in all relevant data and adjustments, the final determination led to the AS being set at zero.

A significant reason for reducing the surcharge to NIL was the amount of demand charges already collected by TGDISCOMs from open access consumers. These demand charges totaled ₹190.23 crore. After subtracting the transmission and distribution charges payable by the same consumers, amounting to ₹127.94 crore, the net amount of demand charges to be adjusted was calculated at ₹62.29 crore. This calculation effectively neutralized the need for any additional surcharge.

The total open access sales considered in this determination amounted to 254.72 million units (MU) for the six-month period from October 2025 to March 2026. By balancing the various revenues and costs associated with Open Access consumption, the Commission concluded that no further surcharge was necessary for the upcoming half-year. This adjustment reflects careful consideration of the financial position of the distribution companies and ensures that industrial and commercial consumers benefit from cost savings during the winter months.

The TGERC’s order is expected to provide relief to large consumers who rely on third-party power under the Open Access mechanism. By setting the Additional Surcharge to zero, the Commission has effectively reduced the cost burden on these consumers while maintaining a transparent and fair approach to the recovery of stranded costs by the distribution companies. The decision underscores the Commission’s commitment to balancing the interests of consumers with the financial stability of the state’s electricity distribution framework.

The official order was corrected and signed by the TGERC members on September 27, 2025, making the NIL Additional Surcharge effective immediately from October 1, 2025. This regulatory move is likely to encourage more industrial and commercial users to opt for Open Access power, knowing that the previously applicable surcharge will not be imposed during this period. The Commission’s careful review and final adjustment highlight its methodical approach to ensuring fair charges for electricity consumers in Telangana.

The order marks a significant development for the state’s power market and is expected to influence the purchasing decisions of large industrial and commercial entities for the remainder of the financial year.